Lauren Romansky

Culture is having a moment in the sun. In our analysis of earnings calls, Gartner discovered that culture was the most frequently discussed talent issue in 2017, while mentions of the word increased 12 percent from the previous year. When we discuss culture change with HR leaders, their objective is usually to align the culture to changing business models or strategies, in order to accelerate and improve the outcomes of those transformations. A culture challenge is often phrased as: “We need to be more innovative,” or “we’re not as inclusive as we could be.”

But recent events have prompted another set of conversations on what to do when you find yourself in a culture that requires not just an adjustment, but a true overhaul. Many companies have recently faced public scrutiny for possessing workplace environments deemed “toxic”—in terms of enabling sexual harassment, bullying, discrimination, or other forms of unethical conduct. Over the past two years, we’ve seen several high-profile organizations undergo significant organizational restructuring to address this issue. In the #MeToo era, as the corporate world engages in a long-overdue reckoning with sexism and sexual harassment, more of these toxic workplace cultures are sure to be uncovered.

When we talk about a “toxic” culture here, we mean something more than just a low-performing culture demonstrated by low employee engagement, siloed workstreams, or high turnover. Those issues are worth addressing, but cultural toxicity is higher stakes. Toxic cultures engender malevolent harassment or corrupt business practices, protect the perpetrators of these toxic behaviors, and create an unsafe environment for employees, permeated with fear and anxiety. While the symptoms may vary, toxic cultures can directly and acutely damage a business’ reputation, profits, and employer brand, while doing real harm to employees and their careers along the way.

Many HR leaders have walked into a new position, only to find themselves in a deeply toxic culture, and wondered what’s next. Of course, since the door is right there, many of these leaders give feedback with their feet, understandably unwilling to fight a force as large and as nebulous as culture. On the other hand, fixing a toxic culture is one of most powerful and positive legacies an HR leader can achieve, in terms of both employee welfare and the health of the organization.

Before leaving a culturally toxic organization behind, HR leaders should determine whether there is an opportunity to partner with relevant stakeholders and address this problem. Here are some steps you, as an HR leader, can consider:

Like so many companies before us, my company, Rent the Runway, had two tiers of workers. Our salaried employees — who typically came from relatively privileged, educated backgrounds — were given generous parental leave, paid sick leave and the flexibility to work from home, or even abroad. Our hourly employees, working in Rent the Runway’s warehouse, on the customer service team and in our retail stores, had to face life events like caring for a newborn, grieving after the death of a family member or taking care of a critically ill loved one without this same level of benefits.

I had inadvertently created classes of employees — and by doing so, had done my part to contribute to America’s inequality problem. …

In a profile of the company’s D&I program at the Atlantic on the occasion of that report, Jessica Nordell looked at several aspects of Slack’s approach to diversity that make it stand out from the crowd. One of these idiosyncrasies is that unlike many other tech companies, Slack doesn’t have a Chief Diversity Officer or other designated head of D&I:

While studies by the Harvard University professor Frank Dobbin, and colleagues, suggest having someone overseeing diversity efforts can increase the numbers of underrepresented groups in management, other measures, such as mentoring programs and transparency around what it takes to be promoted, are also important; a diversity chief alone may not be enough to make much of a difference. At Slack, the absence of a single diversity leader seems to signal that diversity and inclusion aren’t standalone missions, to be shunted off to a designated specialist, but are rather intertwined with the company’s overall strategy. As the CEO, Stewart Butterfield, has said, he wants these efforts to be something “everyone is engaged in.” Indeed, as the research by Dobbin and colleagues shows, involving employees in diversity policies leads to greater results.

The first lesson here is not “don’t have an appointed head of D&I,” but rather that there’s no one right way to structurally advance D&I. The Dobbin study makes sense because the D&I chief position ensures there’s always a voice in the room, but if any organization thinks they’ve solved D&I by creating a head of D&I role, they are sorely mistaken. In our work at CEB, now Gartner, we’ve seen organizations make progress with a large, singularly focused D&I function, or with a small but connected D&I function; with D&I reporting to HR, to the CEO, to the General Counsel, or to the Corporate Social Responsibility function.

Since March, Nike has been conducting a massive overhaul of its company culture, executive leadership, and HR practices after a covert survey of female employees revealed widespread patterns of sexual harassment, discrimination, and hostile work environments for women. As the New York Times recently reported in a major story reviewing the upheaval, this toxic culture was driving talented women out the door. In recent months, several high-level male executives at Nike have left the company amid the scandal.

Some of these executives stand accused of engaging in sexist practices themselves; others do not, but have been faulted for failing to address employees’ concerns, creating the perception of an executive “boys’ club” in which male managers were protected from consequences for their misbehavior. Another key theme in the Times‘ report is the Nike women’s dissatisfaction with the response they received from HR.

Nike CEO Mark Parker has moved quickly to bring the situation under control and assure employees that the company is taking its culture problems seriously. At an all-company meeting last Thursday, Parker admitted that he and other executives had missed signs of the problems that have come to light recently, apologized to the affected employees, and promised a thorough investigation into their complaints, along with changes to the company’s training and compensation practices to make them more inclusive, particularly toward women.

While Parker and his executive team will be responsible for making these needed changes to Nike’s culture and practices, none of these changes would be possible without the women employees who took the initiative to bring the company’s problems to light. One important takeaway from this story, therefore, is the power and promise of employee-led D&I initiatives.

Last month, a manager at a Philadelphia Starbucks called the police on a pair of black men who were waiting in the store for a business meeting and had yet to make any purchases. A cell phone video of the two men’s subsequent arrest, which also captured other patrons’ outrage over the incident as it happened, quickly went viral and prompted a nationwide conversation about the racial profiling that black Americans often face in places of business. For Starbucks, which has sought to establish itself one of America’s most progressive employers, it has created a crisis, raising questions about whether this was truly an isolated incident and whether the roughly 40 percent of Starbucks employees who identify as racial minorities have faced hostility or felt unwelcome in the workplace—as many Americans of color have indicated in surveys that they do.

In an unprecedented response, Starbucks quickly announced an ambitious initiative in which it will close all of its over 8,000 company-owned US stores on May 29 so that nearly 175,000 employees can attend an anti-bias training. By conveying that the company takes this matter seriously and is committed to addressing it, the announcement won the coffee chain praise in the world of public relations, but from the perspective of HR—and Diversity and Inclusion more specifically—the standards for success are much higher and more difficult to meet. To make this response count as more than a PR spectacle, Starbucks will need to demonstrate that it’s not just making the right kind of noise, but actually making meaningful changes that are tangible to its vast numbers of nonwhite customers and employees. Furthermore, whether the initiative succeeds or fails, it stands to have an impact far beyond this one company. The stakes are high and all eyes are on Starbucks.

From the D&I research team at CEB, now Gartner, here are some points Starbucks should keep in mind in designing and deploying this anti-bias initiative—and for HR leaders at other organizations to consider in their own efforts to combat the insidious problem of bias.

Anti-Bias Training Should Encompass all Stakeholders’ Perspectives

To underscore the importance of this training, Starbucks announced that the curriculum would be designed with help from prominent experts in civil rights and racial justice, including former attorney general Eric Holder, President and Director-Counsel of the NAACP Legal Defense Fund Sherrilyn Ifill, and Bryan Stevenson, founder and Executive Director of the Equal Justice Initiative. This A-list roster lends an extra dose of credibility to the initiative, but Starbucks might also consider engaging with the communities they serve to understand the experiences of their nonwhite customers on a more personal level. A great example of this kind of stakeholder-focused inclusion strategy is ANZ Bank’s accessibility initiative for people with disabilities, which involved stakeholders across the workforce, workplace, and marketplace in determining accessibility goals and how the bank would achieve them. (CEB Diversity & Inclusion Leadership Council members can read the case study here.)

Trump has faced extensive criticism for declining to specifically denounce white supremacism in his initial remarks on the violence and waiting until Monday to do so. On Monday, Merck CEO Kenneth Frazier appeared to echo that criticism in his statement announcing his resignation from the council, writing: “America’s leaders must honor our fundamental values by clearly rejecting expressions of hatred, bigotry and group supremacy.” From an HR and management perspective, these high-profile resignations illustrate how high the stakes have become for American CEOs at a time when millennial employees and customers increasingly expect them to take on an activist role in the social and political issues of the day.

Since Trump’s election last November, HR as PR has taken on a new dimension as the CEOs of corporate America find themselves increasingly called upon to take stances on a variety of social issues ranging from immigrants to LGBTQ rights, from racial tensions to women’s rights. While these decisions have been bold and courted criticism, they have not been fraught with potentially massive blowback—until now.

Google’s decision to fire James Damore, a senior engineer who circulated a memo criticizing the company’s diversity efforts and making questionable claims about the biological differences between men and women, was bound to fan the flames of the controversy the memo had sparked. Was terminating this employee the right call? Reasonable arguments can be made on both sides of the debate, and as our HR practice leader Brian Kropp remarked in an interview with the Washington Post, Google had no good options here: Whether it had fired Damore or declined to fire him, either decision was going to upset a certain group of people.

One of the challenges that any talent executive or head of diversity and inclusion will face when inflammatory internal communications like Damore’s memo go public is in figuring out whether they are dealing with a single person who has managed to rile up the Internet (the “don’t feed the trolls” challenge), or are facing a real source of tension from a segment of the workforce. If it’s the former, it’s a great opportunity to make sure that people are aware that you are addressing D&I, and that it’s a key part of your core values; if the latter, it could prompt the organization to reorganize its D&I strategy along the lines of what Deloitte is doing, and double down on inclusion to ensure that everyone gets on board.

Below are some thoughts on what the Google controversy reveals about the challenges facing diversity and inclusion, as well as what employers can learn from the debate in order to strengthen their future D&I efforts.

The Dangers of Backlash

The downside for an organization of reacting to an incident like this with absolute rejection is that it contributes to the framing of D&I as a zero-sum game, which gives ammunition to those who oppose it. When an organization treats a skeptic like Damore as a threat, employees who fear being left behind by D&I efforts or having their viewpoints marginalized in pursuit of diversity will tend to see that as proof of their point. While Google CEO Sundar Pichai told employees that Damore’s memo had crossed a line by advancing harmful gender stereotypes, he also acknowledged the more valid concerns it raised about whether Google’s approach to diversity was optimal and whether employees with minority opinions could safely express them in the workplace.

In other words, irrespective of whether Damore violated norms of professionalism and collegiality in the way he voiced his opinions, and of whether the company was within its rights to terminate his employment, Google does not want to be perceived as making rules about what employees are allowed to think.